Types of Ownership

Front

Sole proprietorship

Back

Owned by one person who assumes all the profits and risks from the business.

Front

Unlimited liability

Back

Any debts that the business owes can be collected from the owner’s personal assets.

Front

Partnership

Back

A business owned by two or more people who share both profits and liabilities.

Front

General partnership

Back

Each partner has unlimited liability; business debts can be paid by the partners’ personal assets.

Front

Limited partnership

Back

At least one partner has limited liability (limited to their investment).

Front

Corporation

Back

An “artificial being” that exists only in law; functions independently of its owners.

Front

Stockholder (shareholder)

Back

A person who purchases shares of stock in a corporation and becomes a part owner.

Front

Board of directors

Back

People (sometimes stockholders) who make decisions about the activities of a business.

Front

Officers

Back

Company leaders (e.g., president, chief financial officer) who run day-to-day operations.

Front

Private (close) corporation

Back

Does not sell shares to the general public; usually has a few shareholders.